Important new rules on Unfair Dismissal qualifying service came
into force on 6 April.
On Friday 6 April, the Government increased the statutory
qualifying service period for unfair dismissal claims from one year
to two years. The move is part of its ongoing review of unfair
dismissal laws, which it believes are too complex and place a
disproportionate burden on businesses. The change is not
retrospective, so any employee whose period of continuous
employment starts on or after 6 April 2012 will now need to be
employed for two years before they have the right to claim unfair
dismissal, but those who were already employed before 6 April will
still only have to satisfy the one-year test.
The Government is anxious to reduce the burden of employment
laws and to promote growth. It hopes that this measure will give
businesses the confidence to expand by taking on new staff, in the
knowledge that if things don't work out then they can dismiss
poorly performing employees within the first two years without fear
of unfair dismissal claims. While that is a laudable objective, it
remains to be seen whether it will have the desired effect.
One major reason for caution is that the change will not apply
to those cases where no minimum qualifying period of service is
required: namely, where the alleged reason for dismissal is one
deemed to be automatically unfair if proven, such as
'Whistleblowing'; or where the alleged reason is one of the
protected characteristics under the Equality Act 2010; such as
race, sex, age or disability. The door therefore remains open for
determined employees without the necessary two years of service to
bring their claims under those headings and thereby get round the
rule change.
There is also a possibility that there will be a legal challenge
to the lawfulness of having a two-year qualifying period in the
first place, on the basis that it discriminates indirectly against
certain groups of employees. A similar challenge based on sex
discrimination was in fact made in the 1990's - which was the last
time the qualifying period was two years. That was unsuccessful
because the House of Lords accepted that the disproportionate
impact on female employees was objectively justified.
However, discrimination law has developed in scope since the
1990's, and far more groups with particular characteristics are
protected from discriminatory rules. In this context the advent of
age discrimination may be significant, as it may be argued that a
two-year qualifying period has a disproportionate impact on younger
employees.
There is no way of knowing whether a fresh challenge will be
made or if it would meet the same fate. All we know is that a
challenge would herald a period of uncertainty for employers and
employees alike, and would seriously dent the Government's ambition
in this important area of employment law.
Should you require any further information, advice or assistance
on this topic, or on any other employment issue, please do not
hesitate to contact us.
